Market report: Monday close

FRESH falls for the dollar unnerved investors around the world today and prompted one leading player to tell clients to give the equity markets a wide berth.

US house Goldman Sachs has told investors to trim holdings in global equities as it downgraded them from overweight to neutral for the next three months because short-term prospects are 'modest'.

It has also told fund managers to steer clear of bonds and to concentrate resources in commodities, such as gold, and good old cash.

Federal Reserve chairman Alan Greenspan warned on Friday that the huge US budget deficit would lead to further pressure on the dollar and could force interest rates higher. Despite the US government's pledge to operate a strong currency, dealers reckon the dollar will continue to lose ground against its big rivals.

There was heavy selling of shares in the Far East today as the dollar's demise and a strong oil price put the skids under Tokyo and Hong Kong.

That selling spilled over into London, where the FTSE 100 index fell 31.9 points to 4728.9.

Drugs giant AstraZeneca was again on the slide, losing 16p at 2129p. The group is to invest £75m in Cambridge Antibody Technology, up 34 1/1p at 598 1/4p, as part of a strategic alliance aimed at finding

cures for inflammatory diseases. Broker UBS today upgraded AstraZeneca to a buy with a 2740p target but remains neutral on rival GlaxoSmithKline, 14p down at 1133p, for which it has a target of 1130p.

Both companies were panned on Friday after personal comments from the US Food and Drug Administration's Dr David Graham. He was critical of certain drugs produced by them, in particular their potential side-effects. His remarks wiped billions of pounds from their stock market value.

Music-maker EMI ran into profit-taking, off 2 3/4p to 237p in the wake of Friday's profits news and upbeat comments on current trading. But not everyone was impressed. US broker Lehman Brothers has downgraded to equalweight and lowered its profits forecast for 2006.

Miners came under pressure, worried by revived talk of an economic slowdown in China. Anglo-Swiss outfit Xstrata fell 12 1/2p to 915 1/2p on the back of plans to bid $A7.4bn (£3.1bn) for WMC Resources, the Australian nickel, copper and uranium miner.

Other fallers in the sector included Anglo American, 23p to 1265p, Lonmin, 11p to 1028p, and Rio Tinto, 17p to 1520p.

Lehman Brothers has downgraded Scottish Power, off 3p at 389 1/4p, from overweight to equalweight. It has told clients that confidence in the capacity of the group's US arm, PacifiCorp PPW, to deliver has been undermined to such an extent that its share price is trading at a steep discount to its closest peers and the sector.

That valuation is unlikely to unwind in the foreseeable future. The broker has also lowered its 12-month target from 450p to 430p, noting it does not expect the group to reflect a fuller valuation until PPW is sorted out.

Aim-listed IP Live rose 1 1/2p to 56p after announcing details of a placing to raise £756,250. A total of 1.37m shares are being placed at 55p with various institutional investors. The money will be used to expand its business in the live entertainment market.